WORK AND PENSIONS

Employment Project

Andrew Smith: In the 2002 Pre Budget Report the Government announced their intention to try new measures to help people stay and advance in work. These new measures, aimed at helping retention and advancement in work, will be introduced from October 2003 to 2007 in Jobcentre Plus Districts in south-east Wales; Renfrewshire, Inverclyde, Argyll and Bute; Gateshead and South Tyneside; Derbyshire; Manchester and north-east London.
	Across the six areas, we estimate that around 13,000 people will benefit from:
	Support from an Advancement Support Adviser who will help interested lone parents receiving Working Tax Credits and working less than 30 hours a week; lone parents who volunteer for the New Deal for Lone Parents; and interested, unemployed customers who are eligible for New Deal 25 plus;
	Financial incentives to encourage retention and advancement that will be fully disregarded for tax and benefit purposes. These measures, including the use of random assignment, will be evaluated comprehensively by independent qualitative and quantitative research.

TRADE AND INDUSTRY

EC Directives (Electronic Communications Networks and Services)

Stephen Timms: It is the Government's intention to implement the four EC Communications Directives by the required deadline of 25 July 2003 through the legislation contained in the Communications Bill (particularly Part 2 of the Bill) and the orders and regulations to be made under that legislation. It should be perfectly feasible for the Bill to receive Royal Assent and for the necessary orders and regulations to be made in time to ensure that the Directives are implemented by the required date, especially as the Bill was published in draft and has been subject to extensive consultation and legislative scrutiny, and has been amended in the light of the views expressed.
	However, the timetable is tight and there may be circumstances in which it cannot be met. As it would not be an option to fail to implement the Directives by 25 July, if the Bill has not been passed in time the Government would need to bring forward Regulations under the European Communities Act 1972 to ensure that our obligations were met. Such Regulations would, for the interim period until the Bill is passed and brought into force, have broadly the same effect as many of the provisions contained in Part 2 of the Bill. I have therefore just published a consultation document setting out the contingency plan for such interim implementation. Copies of the document, which includes drafts of the Regulations, have been placed in the Libraries of both Houses and the document is available on the internet: http://www.communicationsbill.gov.uk/. Interested parties should respond to my Department by 15 May 2003.
	The consultation document also includes the General Conditions that would be made by the Regulator once the Bill has been passed—following up an initial consultation by Oftel in May 2002. Interested parties should respond to Oftel, also by 15 May 2003.

HOUSE OF COMMONS

Parliamentary Pensions

Ben Bradshaw: The Parliamentary and Other Pensions Act 1987 requires the Government Actuary to make triennial reports on the financial position of the Parliamentary Contributory Pension Fund. His latest report, dealing with the position of the Fund as at 1 April 2002, is published today and a copy of the Parliamentary Contributory Pension Fund Valuation Report (HC445) has been laid in the House. It includes his recommendation on the rate of Exchequer contributions to be made to the Fund, which the Act requires the Government to follow.
	The new rate of Exchequer contribution will be implemented in accordance with the requirements of the Act from 1 April 2003. As the report explains, the increase is almost entirely due to a combination of the contribution holiday enjoyed by the Exchequer for the last 13 years and disappointing investment returns. Since 1990 the Exchequer has been making reduced contributions to the Fund to take the benefit of recurrent actuarial surpluses on the Fund for taxpayers. The current Exchequer contribution of 7.9 per cent. of salary compares with a figure of 18.6 per cent. which would have been required in the absence of a surplus in the Fund. As foreseen in the Government Actuary's last report on the Fund, based on the position at 1 April 1999, the surplus on the scheme has now been exhausted in this way and Exchequer contributions must revert to a level reflecting the long run costs. In common with other pension funds, the Fund has been affected by poor stock market performance over the three years covered by the Government Actuary's report. This, together with the contribution holiday, has contributed to produce a deficit in the Fund of some £25 million.
	The Report also reflects some developments since the introduction of the option for Members to accrue pension benefits at a faster rate in return for higher Member contributions to the Fund. The Government took the advice of the Senior Salaries Review Body on how that option could be introduced to the scheme in a way that did not increase costs to taxpayers overall. The Review Body advised that the change could be made cost neutral if, in addition to higher Member contributions, the balance of costs falling on the scheme were met in the first instance through higher Exchequer contributions which would be taken into account and set off against the Review Body's recommendations from the next review of MPs' pay and allowances. The Review Body intends to take this into account and it will also be addressed in Government evidence to that review.
	The underlying long-term ongoing cost of the pension scheme (as funded by both Exchequer and member contributions), has risen from an average of 24.6 per cent. of salaries at the time of the last valuation (1 April 1999) to 28 per cent. of salaries, an increase of 3.4 per cent. The net cost of the pension accrual rate improvement to the scheme, at 4.6 per cent. of salary, is lower than the Government Actuary's original estimate of 5.1 per cent. because not all Members have opted for the higher accrual rate. Members who have opted for the higher pension accrual rate now pay contributions of 9 per cent. of salary, while those opting to remain on the lower accrual rate continue to contribute 6 per cent. of salary. On average, Member contributions are now 8.7 per cent. of salaries. Technical factors account for the reduction of 1.2 per cent. which would have been seen had the benefit improvement not taken place.
	The Government Actuary has recommended an increase in the level of Exchequer contributions from the current level of 7.9 per cent. of pay, to a new level of 24 per cent. of pay. The increase of 16.1 per cent. may be broken down as follows:
	removal of contribution 'holiday' 10.7 per cent.
	extra contributions to eliminate deficit 4.7 per cent.
	overall increase in scheme costs 0.7 per cent.*
	*The overall increase in scheme costs is shown above as 3.4 per cent. Of this, 2.7 per cent. is covered by the increase in Member contributions, leaving 0.7 per cent. to be borne by the Exchequer.

DEPUTY PRIME MINISTER

Indices of Deprivation 2000

Barbara Roche: I wish to inform the House that we will not be able to publish the updated Indices of Deprivation on the original timescale of July this year.
	The Indices of Deprivation 2000 (ID 2000) combine statistical indicators, on economic, social and housing issues into a single score for each ward in England. This enables all wards to be ranked relative to one another according to their level of deprivation. The Indices are used by Government and other agencies to identify areas where there are concentrations of deprived people. They are, for example, used in the allocation of substantial resources aimed at renewing deprived neighbourhoods. For all these reasons it is therefore important for the Indices to remain a robust way of identifying the most deprived areas. They were last revised in 2000; more recent and detailed data have now become available and last year we began consulting across and outside Government for views on how best to strengthen and update the ID 2000.
	The two-stage consultation period began in November 2002 and was due to be completed by the spring to allow publication in July 2003. We received over 200 responses to the recently concluded Consultation on the Stage One Report with many useful suggestions, including confirmation of the need for data on crime to form part of the revised Indices.
	The timing has been affected by the lack of crime data to form this crime domain. The required data are unlikely to be available until later this year. Additional research is also needed on how to move away from using wards, as the basic geography of the Indices, to one based on geographic units that are more consistent over time and in terms of size. This will allow us to identify areas where very small pockets of deprivation exist and to track change over time. There is more work to do on other aspects such as take-up of means-tested benefits and affordability of housing.
	To investigate these issues in full will involve additional research and analysis so we have decided to delay the second stage of the consultation. We hope to complete this during the autumn with a view to publishing the revised Indices of Deprivation in the winter.